- Total revenue of $204.5
million
- Net income of $19.1 million
- Generated cash flows from operations of $62.7 million
- Increasing 2023 financial guidance
MESA,
Ariz., Aug. 9, 2023 /PRNewswire/ -- Verra
Mobility Corporation (NASDAQ: VRRM), a leading provider of smart
mobility technology solutions, announced today the financial
results for the second quarter ended June
30, 2023.
"We delivered an outstanding second quarter, highlighted by
strong recurring revenue growth and free cash flow generation,"
said David Roberts, President and
CEO, Verra Mobility. "I am
incredibly pleased with our operating performance and am optimistic
about our future. The underlying key trends driving our Commercial
Services business are strong and durable. We have a very favorable
environment driving the future of our Government Solutions
business, and we have prime opportunities for future growth and
profitability for our Parking Solutions business to address
university and municipality parking trends."
Second Quarter 2023 Financial Highlights
- Revenue: Total revenue for the second quarter of 2023
was $204.5 million, an increase of 9%
compared to $187.5 million for the
second quarter of 2022. Service revenue growth was 12% due to
increases in travel volume and related tolling activity in the
Commercial Services segment which grew 11%, and the growth in
service revenue from our Government Solutions segment, which
increased 14% and was driven by the expansion of speed programs.
Parking Solutions service revenue increased 11% due to increases in
our software as a service (SaaS) product offerings and various
services related to parking management solutions.
- Net income: Net income for the second quarter of 2023
was $19.1 million, or $0.13 per share based on 152.6 million diluted
weighted average shares outstanding. Net income for the comparable
2022 period was $29.6 million, or
$0.15 per share, based on 160.3
million diluted weighted average shares outstanding.
- Adjusted Earnings Per Share (EPS): Adjusted EPS for the
second quarter of 2023 was $0.29 per
share compared to $0.27 per share for
the second quarter of 2022.
- Adjusted EBITDA: Adjusted EBITDA was $95.0 million for the second quarter of 2023
compared to $88.8 million for the
same period last year. Adjusted EBITDA margin was 46% of total
revenue for 2023 and 47% for 2022. The growth in Adjusted EBITDA
was driven primarily by revenue volume across our business
segments.
We report our results of operations based on three operating
segments:
- Commercial Services offers automated toll and violations
management and title and registration solutions to rental car
companies, fleet management companies and other large fleet
owners.
- Government Solutions delivers automated safety solutions
to municipalities, school districts and government agencies,
including services and technology that enable photo enforcement
related to speed, red-light, school bus and city bus lane
management.
- Parking Solutions provides an integrated suite of
parking software and hardware solutions to universities,
municipalities, parking operators, healthcare facilities and
transportation hubs in the United
States and Canada.
Second Quarter 2023 Segment Detail
- The Commercial Services segment generated total revenue of
$94.5 million, a 11% increase
compared to $84.9 million in the same
period in 2022. Segment profit was $61.1
million, a 8% increase from $56.5
million in the prior year. The increases in revenue and
profit compared to the prior period resulted from increased travel
volume and the continued adoption of the all-inclusive fee
structure for our RAC customers as well as the increase in enrolled
vehicles and higher tolling activity for our FMC customers. The
segment profit margin was 65% for 2023 and 67% for 2022.
- The Government Solutions segment generated total revenue of
$88.3 million, a 6% increase compared
to $83.5 million in the same period
in 2022. The increase was primarily driven by the expansion of
speed programs, as speed is the largest product in this segment.
The remaining increase is attributable to expansions across
red-light, bus-lane, and school bus stop arm programs in various
cities in the United States. The
segment profit was $30.4 million in
2023 compared to $29.2 million in the
prior year with segment profit margins of 34% for 2023 and 35% for
2022. The increase in segment profit is primarily attributable to
the increase in recurring service revenue and a reduction in bad
debt expense due to improved cash collections.
- The Parking Solutions segment generated total revenue of
$21.8 million a 14% increase compared
to $19.1 million in the same period
in 2022. The segment profit was $3.5
million compared to $3.0
million in the prior year with segment profit margins of 16%
for both 2023 and 2022. The increase in segment profit is primarily
attributable to increased revenue volume.
Liquidity: As of June 30,
2023, cash and cash equivalents were $210.1 million, and we generated $107.9 million in cash flows from operations for
the six months ended June 30,
2023.
Interest Rate Swap
In December 2022, we entered into
a cancellable interest rate swap agreement to hedge our exposure to
interest rate fluctuations associated with the LIBOR (now
transitioned to Term Secured Overnight Financing Rate) portion of
the variable interest rate on our 2021 Term Loan. Under the
interest rate swap agreement, we pay a fixed rate of 5.17% and the
counterparty pays a variable interest rate which is net settled.
The notional amount on the interest rate swap is $675.0 million. We have the option to terminate
the interest rate swap agreement starting in December 2023, and monthly thereafter until
December 2025 in the event interest
rates decrease. Any changes in the fair value of the derivative
instrument (including accrued interest) and related cash payments
are recorded in the condensed consolidated statements of operations
within the gain on interest rate swap line item. We recorded a
$4.8 million gain during the three
months ended June 30, 2023, of which
approximately $5.1 million is
associated with the derivative instrument re-measured to fair value
at the end of the reporting period, netted by $0.3 million related to the monthly cash
payments. We recorded a $2.0 million
gain during the six months ended June 30,
2023, of which approximately $3.6
million is associated with the derivative instrument
re-measured to fair value at the end of the reporting period,
netted by $1.6 million related to
monthly cash payments.
Warrants
During the six months ended June 30,
2023, the Company processed the exercise of 17.0 million
warrants in exchange for the issuance of 14,840,070 shares of Class
A Common Stock. There were 13,782,411 shares issued on a cash-basis
resulting in the receipt of $105.8
million in cash proceeds as of June
30, 2023 and $52.7 million of
cash proceeds received in July 2023.
The remaining warrant exercises were completed on a cashless
basis.
Subsequent to June 30, 2023, there
were an additional 254,038 warrants exercised in exchange for
253,478 shares of Class A Common Stock.
2023 Full Year Guidance
Any guidance that we provide is subject to change as a variety
of factors can affect actual operating results. Certain of the
factors that may impact our actual operating results are identified
below in the safe harbor language included within Forward-Looking
Statements of this press release.
Based on our year-to-date results and our outlook for the
remainder of the year, we are expecting to deliver results as
follows:
|
Previous
Guidance
|
Updated
Guidance
|
Total
Revenue
|
$780 million to $800
million
|
$800 million to $810
million
|
Adjusted
EBITDA
|
$360 million to $370
million
|
Upper end of
range
|
Adjusted EPS
|
$1.00 to
$1.10
|
$1.00 to
$1.10
|
Free Cash
Flow
|
$135 million to $155
million
|
Upper end of
range
|
Conference Call Details
Date: August 9, 2023
Time: 5:00 p.m. Eastern Time
U.S. and Canadian Callers Dial-in: 1-888-886-7786
Outside of U.S. and Canada Dial-in: 1-416-764-8658 for
international callers with conference ID 11014275
Request a return call: Available by clicking on the
following link and requesting a return
call: callme.viavid.com
Webcast Information: Available live in the "Investor
Relations" section of our website at
http://ir.verramobility.com.
An audio replay of the call will also be available until
11:59 p.m. ET on August 23, 2023, by dialing 1-844-512-2921 for
the U.S. or Canada, and
1-412-317-6671 for international callers and entering passcode
11014275. In addition, an archived webcast will be available in the
"News & Events" section of the Investor Relations website at
http://ir.verramobility.com.
About Verra Mobility
Verra Mobility is a leading provider of smart mobility
technology solutions that make transportation safer, smarter and
more connected. We sit at the center of the mobility ecosystem,
bringing together vehicles, hardware, software, data and people to
enable safe, efficient solutions for customers globally. Verra
Mobility's transportation safety systems and parking management
solutions protect lives, improve urban and motorway mobility and
support healthier communities. We also solve complex payment,
utilization and compliance challenges for fleet owners and rental
car companies. Headquartered in Arizona, Verra Mobility operates in
North America, Europe, Asia
and Australia. For more
information, please visit www.verramobility.com.
Forward-Looking Statements
This press release contains forward-looking statements which
address our expected future business and financial performance, and
may contain words such as "goal," "target," "future," "estimate,"
"expect," "anticipate," "intend," "plan," "believe," "seek,"
"project," "may," "should," "will" or similar expressions. Examples
of forward-looking statements include, among others, statements
regarding the benefits of our strategic acquisitions, changes in
the market for our products and services, expected operating
results, such as revenue growth, expansion plans and opportunities,
and earnings guidance related to 2023 financial and operational
metrics. Forward-looking statements involve risks and uncertainties
and a number of factors could cause actual results to differ
materially from those currently anticipated. These factors include,
but are not limited to: (1) customer concentration in our
Commercial Services and Government Solutions segments; (2) our
ability to manage our substantial level of indebtedness; (3) risks
and uncertainties related to our government contracts, including
legislative changes, termination rights, delays in payments, audits
and investigations; (4) decreases in the prevalence of automated
and other similar methods of photo enforcement, parking solutions
or the use of tolling; (5) our ability to keep up with
technological developments and changing customer preferences; (6)
our ability to compete in a highly competitive and rapidly evolving
market; (7) decreased interest in outsourcing from our customers;
(8) the success of our new products and changes to existing
products and services; (9) our ability to successfully implement
our acquisition strategy or integrate acquisitions; (10) failure in
or breaches of our networks or systems, including as a result of
cyber-attacks; (11) our ability to manage the risks, uncertainties
and exposures related to our international operations; (12) our
ability to acquire necessary intellectual property and adequately
protect our existing intellectual property; (13) risks and
uncertainties related to our share repurchase program; (14) our
reliance on a limited number of third-party vendors and service
providers; (15) our ability to maintain an effective system of
internal controls; (16) risks and uncertainties related to
litigation, disputes and regulatory investigations; (17) our
ability to properly perform under our contracts and otherwise
satisfy our customers; (18) the impact of COVID-19 on our business
and results of operations; and (19) other risks and uncertainties
indicated from time to time in documents filed or to be filed with
the Securities and Exchange Commission (the "SEC") by Verra
Mobility. This press release should be read in conjunction with the
information included in our other press releases, reports and other
filings with the SEC. Understanding the information contained in
these filings is important in order to fully understand our
reported financial results and our business outlook for future
periods.
Additional Information
We periodically provide information for investors on our
corporate website, www.verramobility.com, and our investor
relations website, ir.verramobility.com.
We intend to use our website as a means of disclosing material
non-public information and for complying with disclosure
obligations under Regulation FD. Accordingly, investors should
monitor our website, in addition to following our press releases,
SEC filings and public conference calls and webcasts.
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined
in accordance with U.S. generally accepted accounting principles
("GAAP"), we also disclose certain non-GAAP financial information
in this press release. These financial measures are not recognized
measures under GAAP and are not intended to be, and should not be,
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with
GAAP. EBITDA, Adjusted EBITDA, Free Cash Flow, Adjusted Net Income,
Adjusted EPS and Adjusted EBITDA Margin are non-GAAP financial
measures as defined by SEC rules. These non-GAAP financial measures
may be determined or calculated differently by other companies. As
a result, they may not be comparable to similarly titled
performance measures presented by other companies. Reconciliations
of these non-GAAP measurements to the most directly comparable GAAP
financial measurements have been provided in the financial
statement tables included in this press release, and investors are
encouraged to review the reconciliations.
We are not providing a quantitative reconciliation of Adjusted
EBITDA or Adjusted EPS, both of which are included in our 2023
financial guidance above, in reliance on the "unreasonable efforts"
exception for forward-looking non-GAAP measures set forth in SEC
rules because certain financial information, the probable
significance of which cannot be determined, is not available and
cannot be reasonably estimated without unreasonable effort and
expense. In this regard, we are unable to provide a reconciliation
of forward-looking Adjusted EBITDA to GAAP net income as well as
Adjusted EPS to net income per share, due to the inherent
difficulty in forecasting and quantifying certain amounts that are
necessary for such reconciliation. Due to the uncertainty of
estimates and assumptions used in preparing forward-looking
non-GAAP measures, we caution investors that actual results could
differ materially from these non-GAAP financial projections.
We use these non-GAAP financial metrics to measure our
performance from period to period both at the consolidated level as
well as within our operating segments, to evaluate and fund
incentive compensation programs and to compare our results to those
of our competitors. In addition, we also believe that these
non-GAAP measures provide useful information to investors regarding
financial and business trends related to our results of operations
and that when non-GAAP financial information is viewed with GAAP
financial information, investors are provided with a more
meaningful understanding of our ongoing operating performance.
These non-GAAP measures have certain limitations as analytical
tools and should not be used as substitutes for net income, cash
flows from operations, earnings per share or other consolidated
income or cash flow data prepared in accordance with GAAP.
EBITDA and Adjusted EBITDA
We define EBITDA as net income adjusted to exclude interest
expense, net, income taxes, depreciation and amortization. Adjusted
EBITDA further excludes certain non-cash expenses and other
transactions that management believes are not indicative of our
ongoing operating performance. EBITDA and Adjusted EBITDA, as
defined, exclude some but not all items that affect our cash flow
from operating activities.
Free Cash Flow
We define "Free Cash Flow" as cash flow from
operations less capital expenditures.
Adjusted Net Income
We define "Adjusted Net Income" as net income adjusted to
exclude amortization of intangibles and certain non-cash or
non-recurring expenses.
Adjusted EPS
We define "Adjusted EPS" as Adjusted Net Income divided by the
diluted weighted average shares for the period.
Adjusted EBITDA Margin
We define "Adjusted EBITDA Margin" as Adjusted EBITDA as a
percentage of total revenue.
VERRA MOBILITY
CORPORATION CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
|
|
($ in thousands
except per share data)
|
|
June 30,
2023
|
|
|
December 31,
2022
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
210,083
|
|
|
$
|
105,204
|
|
Restricted
cash
|
|
|
3,416
|
|
|
|
3,911
|
|
Accounts receivable
(net of allowance for credit losses of $20.1 million and
$15.9 million at June 30, 2023 and December 31, 2022,
respectively)
|
|
|
179,944
|
|
|
|
163,786
|
|
Unbilled
receivables
|
|
|
36,843
|
|
|
|
30,782
|
|
Inventory
|
|
|
19,791
|
|
|
|
19,307
|
|
Prepaid expenses and
other current assets
|
|
|
92,509
|
|
|
|
39,604
|
|
Total current
assets
|
|
|
542,586
|
|
|
|
362,594
|
|
Installation and
service parts, net
|
|
|
25,393
|
|
|
|
22,923
|
|
Property and equipment,
net
|
|
|
114,467
|
|
|
|
109,775
|
|
Operating lease
assets
|
|
|
37,170
|
|
|
|
37,593
|
|
Intangible assets,
net
|
|
|
335,781
|
|
|
|
377,420
|
|
Goodwill
|
|
|
835,323
|
|
|
|
833,480
|
|
Other non-current
assets
|
|
|
15,440
|
|
|
|
12,484
|
|
Total assets
|
|
$
|
1,906,160
|
|
|
$
|
1,756,269
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
78,410
|
|
|
$
|
79,869
|
|
Deferred
revenue
|
|
|
36,744
|
|
|
|
31,164
|
|
Accrued
liabilities
|
|
|
51,642
|
|
|
|
48,847
|
|
Tax receivable
agreement liability, current portion
|
|
|
4,994
|
|
|
|
4,994
|
|
Current portion of
long-term debt
|
|
|
9,019
|
|
|
|
21,935
|
|
Total current
liabilities
|
|
|
180,809
|
|
|
|
186,809
|
|
Long-term debt, net of
current portion
|
|
|
1,129,692
|
|
|
|
1,190,045
|
|
Operating lease
liabilities, net of current portion
|
|
|
32,331
|
|
|
|
33,362
|
|
Tax receivable
agreement liability, net of current portion
|
|
|
50,900
|
|
|
|
50,900
|
|
Private placement
warrant liabilities
|
|
|
5,430
|
|
|
|
24,066
|
|
Asset retirement
obligations
|
|
|
13,729
|
|
|
|
12,993
|
|
Deferred tax
liabilities, net
|
|
|
20,583
|
|
|
|
21,149
|
|
Other long-term
liabilities
|
|
|
7,386
|
|
|
|
5,875
|
|
Total
liabilities
|
|
|
1,440,860
|
|
|
|
1,525,199
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Preferred stock,
$0.0001 par value
|
|
|
—
|
|
|
|
—
|
|
Common stock, $0.0001
par value
|
|
|
17
|
|
|
|
15
|
|
Common stock contingent
consideration
|
|
|
18,287
|
|
|
|
36,575
|
|
Additional paid-in
capital
|
|
|
533,626
|
|
|
|
305,423
|
|
Accumulated
deficit
|
|
|
(74,393)
|
|
|
|
(98,078)
|
|
Accumulated other
comprehensive loss
|
|
|
(12,237)
|
|
|
|
(12,865)
|
|
Total stockholders'
equity
|
|
|
465,300
|
|
|
|
231,070
|
|
Total liabilities and
stockholders' equity
|
|
$
|
1,906,160
|
|
|
$
|
1,756,269
|
|
VERRA MOBILITY
CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE
INCOME (Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
($ in thousands,
except per share data)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Service
revenue
|
|
$
|
196,050
|
|
|
$
|
174,502
|
|
|
$
|
380,748
|
|
|
$
|
335,636
|
|
Product
sales
|
|
|
8,411
|
|
|
|
12,985
|
|
|
|
15,616
|
|
|
|
22,236
|
|
Total
revenue
|
|
|
204,461
|
|
|
|
187,487
|
|
|
|
396,364
|
|
|
|
357,872
|
|
Cost of service
revenue
|
|
|
4,338
|
|
|
|
3,713
|
|
|
|
8,568
|
|
|
|
7,492
|
|
Cost of product
sales
|
|
|
5,962
|
|
|
|
8,326
|
|
|
|
11,345
|
|
|
|
14,321
|
|
Operating
expenses
|
|
|
65,657
|
|
|
|
55,196
|
|
|
|
127,500
|
|
|
|
106,259
|
|
Selling, general and
administrative expenses
|
|
|
43,205
|
|
|
|
40,152
|
|
|
|
83,218
|
|
|
|
81,787
|
|
Depreciation,
amortization and (gain) loss on disposal of
assets, net
|
|
|
29,088
|
|
|
|
34,939
|
|
|
|
59,421
|
|
|
|
70,846
|
|
Total costs and
expenses
|
|
|
148,250
|
|
|
|
142,326
|
|
|
|
290,052
|
|
|
|
280,705
|
|
Income from
operations
|
|
|
56,211
|
|
|
|
45,161
|
|
|
|
106,312
|
|
|
|
77,167
|
|
Interest expense,
net
|
|
|
22,771
|
|
|
|
14,485
|
|
|
|
45,458
|
|
|
|
28,764
|
|
Change in fair value of
private placement warrants
|
|
|
10,918
|
|
|
|
(6,600)
|
|
|
|
25,519
|
|
|
|
(2,866)
|
|
Tax receivable
agreement liability adjustment
|
|
|
—
|
|
|
|
(965)
|
|
|
|
—
|
|
|
|
(965)
|
|
Gain on interest rate
swap
|
|
|
(4,805)
|
|
|
|
—
|
|
|
|
(2,007)
|
|
|
|
—
|
|
Loss on extinguishment
of debt
|
|
|
209
|
|
|
|
—
|
|
|
|
1,558
|
|
|
|
—
|
|
Other income,
net
|
|
|
(4,512)
|
|
|
|
(4,039)
|
|
|
|
(8,268)
|
|
|
|
(6,905)
|
|
Total other
expenses
|
|
|
24,581
|
|
|
|
2,881
|
|
|
|
62,260
|
|
|
|
18,028
|
|
Income before income
taxes
|
|
|
31,630
|
|
|
|
42,280
|
|
|
|
44,052
|
|
|
|
59,139
|
|
Income tax
provision
|
|
|
12,522
|
|
|
|
12,639
|
|
|
|
20,367
|
|
|
|
19,458
|
|
Net
income
|
|
$
|
19,108
|
|
|
$
|
29,641
|
|
|
$
|
23,685
|
|
|
$
|
39,681
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in foreign
currency translation adjustment
|
|
|
718
|
|
|
|
(10,381)
|
|
|
|
628
|
|
|
|
(7,673)
|
|
Total comprehensive
income
|
|
$
|
19,826
|
|
|
$
|
19,260
|
|
|
$
|
24,313
|
|
|
$
|
32,008
|
|
Net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.16
|
|
|
$
|
0.26
|
|
Diluted
|
|
$
|
0.13
|
|
|
$
|
0.15
|
|
|
$
|
0.16
|
|
|
$
|
0.23
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
151,132
|
|
|
|
154,694
|
|
|
|
150,151
|
|
|
|
155,408
|
|
Diluted
|
|
|
152,590
|
|
|
|
160,344
|
|
|
|
151,586
|
|
|
|
161,507
|
|
VERRA MOBILITY
CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
19,108
|
|
|
$
|
29,641
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
28,996
|
|
|
|
34,540
|
|
Amortization of
deferred financing costs and discounts
|
|
|
1,192
|
|
|
|
1,387
|
|
Change in fair value
of private placement warrants
|
|
|
10,918
|
|
|
|
(6,600)
|
|
Tax receivable
agreement liability adjustment
|
|
|
—
|
|
|
|
(965)
|
|
Gain on interest rate
swap
|
|
|
(5,115)
|
|
|
|
—
|
|
Loss on extinguishment
of debt
|
|
|
209
|
|
|
|
—
|
|
Credit loss
expense
|
|
|
3,259
|
|
|
|
3,531
|
|
Deferred income
taxes
|
|
|
(2,484)
|
|
|
|
3,071
|
|
Stock-based
compensation
|
|
|
4,525
|
|
|
|
4,566
|
|
Other
|
|
|
126
|
|
|
|
406
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(4,849)
|
|
|
|
(4,812)
|
|
Unbilled
receivables
|
|
|
(2,656)
|
|
|
|
5,347
|
|
Inventory
|
|
|
(235)
|
|
|
|
(1,675)
|
|
Prepaid expenses and
other assets
|
|
|
(3,232)
|
|
|
|
696
|
|
Deferred
revenue
|
|
|
5,673
|
|
|
|
2,871
|
|
Accounts payable and
other current liabilities
|
|
|
13,181
|
|
|
|
2,188
|
|
Other
liabilities
|
|
|
(5,906)
|
|
|
|
(9,064)
|
|
Net cash provided by
operating activities
|
|
|
62,710
|
|
|
|
65,128
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Payment of contingent
consideration
|
|
|
—
|
|
|
|
(235)
|
|
Payments for interest
rate swap
|
|
|
(310)
|
|
|
|
—
|
|
Purchases of
installation and service parts and property and
equipment
|
|
|
(11,726)
|
|
|
|
(11,246)
|
|
Cash proceeds from the
sale of assets
|
|
|
95
|
|
|
|
47
|
|
Net cash used in
investing activities
|
|
|
(11,941)
|
|
|
|
(11,434)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
|
(12,254)
|
|
|
|
(2,255)
|
|
Payment of debt
issuance costs
|
|
|
(148)
|
|
|
|
(192)
|
|
Proceeds from the
exercise of warrants
|
|
|
105,750
|
|
|
|
—
|
|
Share repurchases and
retirement
|
|
|
—
|
|
|
|
(55,281)
|
|
Proceeds from the
exercise of stock options
|
|
|
1,689
|
|
|
|
66
|
|
Payment of employee
tax withholding related to RSUs and PSUs vesting
|
|
|
(502)
|
|
|
|
(203)
|
|
Net cash provided by
(used in) financing activities
|
|
|
94,535
|
|
|
|
(57,865)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
378
|
|
|
|
(2,661)
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
145,682
|
|
|
|
(6,832)
|
|
Cash, cash equivalents
and restricted cash - beginning of period
|
|
|
67,817
|
|
|
|
97,393
|
|
Cash, cash equivalents
and restricted cash - end of period
|
|
$
|
213,499
|
|
|
$
|
90,561
|
|
VERRA MOBILITY
CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
|
|
|
|
Six Months Ended
June 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$
|
23,685
|
|
|
$
|
39,681
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
59,305
|
|
|
|
70,215
|
|
Amortization of
deferred financing costs and discounts
|
|
|
2,469
|
|
|
|
2,693
|
|
Change in fair value
of private placement warrants
|
|
|
25,519
|
|
|
|
(2,866)
|
|
Tax receivable
agreement liability adjustment
|
|
|
—
|
|
|
|
(965)
|
|
Gain on interest rate
swap
|
|
|
(3,563)
|
|
|
|
—
|
|
Loss on extinguishment
of debt
|
|
|
1,558
|
|
|
|
—
|
|
Credit loss
expense
|
|
|
4,956
|
|
|
|
7,036
|
|
Deferred income
taxes
|
|
|
(4,733)
|
|
|
|
(15,700)
|
|
Stock-based
compensation
|
|
|
7,903
|
|
|
|
9,012
|
|
Other
|
|
|
134
|
|
|
|
760
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(21,071)
|
|
|
|
(19,112)
|
|
Unbilled
receivables
|
|
|
(6,120)
|
|
|
|
(4,918)
|
|
Inventory
|
|
|
(55)
|
|
|
|
(7,397)
|
|
Prepaid expenses and
other assets
|
|
|
3,000
|
|
|
|
8,931
|
|
Deferred
revenue
|
|
|
5,768
|
|
|
|
2,917
|
|
Accounts payable and
other current liabilities
|
|
|
8,890
|
|
|
|
1,711
|
|
Other
liabilities
|
|
|
282
|
|
|
|
4,377
|
|
Net cash provided by
operating activities
|
|
|
107,927
|
|
|
|
96,375
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Payment of contingent
consideration
|
|
|
—
|
|
|
|
(647)
|
|
Payments for interest
rate swap
|
|
|
(1,556)
|
|
|
|
—
|
|
Purchases of
installation and service parts and property and
equipment
|
|
|
(30,098)
|
|
|
|
(22,724)
|
|
Cash proceeds from the
sale of assets
|
|
|
129
|
|
|
|
72
|
|
Net cash used in
investing activities
|
|
|
(31,525)
|
|
|
|
(23,299)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Repayment on the
revolver
|
|
|
—
|
|
|
|
(25,000)
|
|
Repayment of long-term
debt
|
|
|
(77,009)
|
|
|
|
(4,510)
|
|
Payment of debt
issuance costs
|
|
|
(192)
|
|
|
|
(246)
|
|
Proceeds from the
exercise of warrants
|
|
|
105,750
|
|
|
|
—
|
|
Share repurchases and
retirement
|
|
|
—
|
|
|
|
(55,281)
|
|
Proceeds from the
exercise of stock options
|
|
|
2,388
|
|
|
|
159
|
|
Payment of employee
tax withholding related to RSUs and PSUs vesting
|
|
|
(3,028)
|
|
|
|
(1,639)
|
|
Net cash provided by
(used in) financing activities
|
|
|
27,909
|
|
|
|
(86,517)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
73
|
|
|
|
(430)
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
104,384
|
|
|
|
(13,871)
|
|
Cash, cash equivalents
and restricted cash - beginning of period
|
|
|
109,115
|
|
|
|
104,432
|
|
Cash, cash equivalents
and restricted cash - end of period
|
|
$
|
213,499
|
|
|
$
|
90,561
|
|
VERRA MOBILITY
CORPORATION
|
|
ADJUSTED EBITDA
RECONCILIATION (Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net
income
|
|
$
|
19,108
|
|
|
$
|
29,641
|
|
|
$
|
23,685
|
|
|
$
|
39,681
|
|
Interest expense,
net
|
|
|
22,771
|
|
|
|
14,485
|
|
|
|
45,458
|
|
|
|
28,764
|
|
Income tax
provision
|
|
|
12,522
|
|
|
|
12,639
|
|
|
|
20,367
|
|
|
|
19,458
|
|
Depreciation and
amortization
|
|
|
28,996
|
|
|
|
34,540
|
|
|
|
59,305
|
|
|
|
70,215
|
|
EBITDA
|
|
|
83,397
|
|
|
|
91,305
|
|
|
|
148,815
|
|
|
|
158,118
|
|
Transaction and other
related expenses
|
|
|
64
|
|
|
|
273
|
|
|
|
332
|
|
|
|
489
|
|
Transformation
expenses
|
|
|
665
|
|
|
|
180
|
|
|
|
724
|
|
|
|
266
|
|
Change in fair value of
private placement warrants (i)
|
|
|
10,918
|
|
|
|
(6,600)
|
|
|
|
25,519
|
|
|
|
(2,866)
|
|
Tax receivable
agreement liability adjustment (ii)
|
|
|
—
|
|
|
|
(965)
|
|
|
|
—
|
|
|
|
(965)
|
|
Gain on interest rate
swap (iii)
|
|
|
(4,805)
|
|
|
|
—
|
|
|
|
(2,007)
|
|
|
|
—
|
|
Loss on extinguishment
of debt (iv)
|
|
|
209
|
|
|
|
—
|
|
|
|
1,558
|
|
|
|
—
|
|
Stock-based
compensation (v)
|
|
|
4,525
|
|
|
|
4,566
|
|
|
|
7,903
|
|
|
|
9,012
|
|
Adjusted
EBITDA
|
|
$
|
94,973
|
|
|
$
|
88,759
|
|
|
$
|
182,844
|
|
|
$
|
164,054
|
|
|
|
(i)
|
This consists of
adjustments to the private placement warrants liability from the
re-measurement to fair value at the end of each reporting period,
or a final re-measurement upon their exercise.
|
(ii)
|
The Tax Receivable
Agreement liability adjustment in 2022 arose from lower estimated
state tax rates due to changes in apportionment.
|
(iii)
|
Gain on interest rate
swap is associated with the derivative instrument re-measured to
fair value at the end of the reporting period offset by the related
monthly cash payments.
|
(iv)
|
Loss on extinguishment
of debt consists of the write-off of pre-existing original issue
discounts and deferred financing costs associated with the
repayment of debt.
|
(v)
|
Stock-based
compensation represents the non-cash charge related to the issuance
of awards under the Verra Mobility Corporation 2018 Equity
Incentive Plan.
|
FREE CASH FLOW
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
($ in
thousands)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net cash provided by
operating activities
|
|
$
|
62,710
|
|
|
$
|
65,128
|
|
|
$
|
107,927
|
|
|
$
|
96,375
|
|
Purchases of
installation and service parts and property
and equipment
|
|
|
(11,726)
|
|
|
|
(11,246)
|
|
|
|
(30,098)
|
|
|
|
(22,724)
|
|
Free cash
flow
|
|
$
|
50,984
|
|
|
$
|
53,882
|
|
|
$
|
77,829
|
|
|
$
|
73,651
|
|
ADJUSTED EPS
(Unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(In thousands,
except per share data)
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
Net
income
|
|
$
|
19,108
|
|
|
$
|
29,641
|
|
|
$
|
23,685
|
|
|
$
|
39,681
|
|
Amortization of
intangibles
|
|
|
20,034
|
|
|
|
27,175
|
|
|
|
42,002
|
|
|
|
54,506
|
|
Transaction and other
related expenses
|
|
|
64
|
|
|
|
273
|
|
|
|
332
|
|
|
|
489
|
|
Transformation
expenses
|
|
|
665
|
|
|
|
180
|
|
|
|
724
|
|
|
|
266
|
|
Change in fair value
of private placement warrants
|
|
|
10,918
|
|
|
|
(6,600)
|
|
|
|
25,519
|
|
|
|
(2,866)
|
|
Tax receivable
agreement liability adjustment
|
|
|
—
|
|
|
|
(965)
|
|
|
|
—
|
|
|
|
(965)
|
|
Change in fair value
of interest rate swap
|
|
|
(5,115)
|
|
|
|
—
|
|
|
|
(3,563)
|
|
|
|
—
|
|
Loss on extinguishment
of debt
|
|
|
209
|
|
|
|
—
|
|
|
|
1,558
|
|
|
|
—
|
|
Stock-based
compensation
|
|
|
4,525
|
|
|
|
4,566
|
|
|
|
7,903
|
|
|
|
9,012
|
|
Total adjustments
before income tax effect
|
|
|
31,300
|
|
|
|
24,629
|
|
|
|
74,475
|
|
|
|
60,442
|
|
Income tax effect on
adjustments
|
|
|
(6,253)
|
|
|
|
(10,302)
|
|
|
|
(14,693)
|
|
|
|
(20,567)
|
|
Total adjustments
after income tax effect
|
|
|
25,047
|
|
|
|
14,327
|
|
|
|
59,782
|
|
|
|
39,875
|
|
Adjusted Net
Income
|
|
$
|
44,155
|
|
|
$
|
43,968
|
|
|
$
|
83,467
|
|
|
$
|
79,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EPS
|
|
$
|
0.29
|
|
|
$
|
0.27
|
|
|
$
|
0.55
|
|
|
$
|
0.49
|
|
Diluted weighted
average shares outstanding
|
|
|
152,590
|
|
|
|
160,344
|
|
|
|
151,586
|
|
|
|
161,507
|
|
Beginning in the third quarter of 2022, we removed the (i)
change in fair value of private placement warrants (ii) tax
receivable agreement liability adjustment and (iii) loss on
extinguishment of debt from total adjustments before income tax
effect prior to applying our annual estimated effective income tax
rate to calculate the income tax effect on adjustments. These
discrete items are being removed because they do not impact taxable
income. In addition, we began using our annual estimated effective
tax rate in lieu of the period-to-date effective tax rate from our
consolidated statements of operations, in calculating the income
tax effect on total adjustments to net income. We believe that our
annual estimated effective income tax rate provides investors a
more meaningful effective tax rate than our period-to-date
effective tax rate, which included the discrete items named above.
The comparable prior periods have been recast to conform to the
revised presentation although the impact of this revision to
previously reported Adjusted Net Income or Adjusted EPS was not
material.
Investor Relations Contact
Mark Zindler
mark.zindler@verramobility.com
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multimedia:https://www.prnewswire.com/news-releases/verra-mobility-announces-second-quarter-2023-financial-results-301897006.html
SOURCE Verra Mobility